Will Williams wrote: ↑Wed Dec 18, 2024 8:24 pm
Aw, too bad. Those Whites speculating on Wall Street should have invested in something better.
I should have listened to those National Alliance people.
[Today, 18 December, 2024] the Dow tumbled more than 1,100 points, or 2.6%...
It’s the Dow’s 11th-straight trading session in the red, the longest losing streak since 1974.
And Wednesday is the Dow’s steepest point drop since September 2022.
I had enough of the S&P roller coaster after 2022-23. It would've been nice not be fooled into cashing in my stocks right before the rally of late-2023 and 2024. I wouldn't know what to tell new corporate employees just entering the job market now. They will be buying stocks for retirement at historic high prices, or "valuations" having some very high Price/Earnings ratios, usually now over 28, but with many companies well over that, on up to 100. High P/E ratios (and Price/Sale ratios) are normal now for tech stocks such as Nvidia or Microsoft, as high future price growth is always expected. Background: A stock's Yield is the P/E ratio inverse, for 2% yield on a P/E ratio of 50 and 3.3% yield on a P/E ratio of 30. Money market savings accounts now provide about a 4% yield. An increase in interest rates made by the Federal Reserve to control tariff-driven inflation could trigger a stock market slide, as rising yields in those money markets, from the higher interest rates, surpass stock yields and draw investors away from stocks.
We also are overdue for a stock price correction (April's dip shows the market's emotional fragility, not a correction) based on history, see attached graph (June 30 result not included). It all gets worse if quarterly corporate Earnings rates start to fall, as that automatically increases the P/E ratios by the corresponding earning rate drops.
Yet, the Wall St. analysts are still all in with Strong Buy recommendations for many stocks. Investors now go with price momentum and not with fundamentals like P/E ratios, but heaven help ordinary investors if there are bad earnings results from a stock, such as a lower-than-predicted earnings report or "surprise", as the price can fall severely in non-regular PreMarket or AfterHours trading, when most investors are busy doing other things like eating dinner or getting ready for work. Stop Orders meant to automatically sell stocks if their prices fall below a set price, fail to work during non-regular trading-hours (Regular trading hours are 9:30am - 4pm), so stocks open at 9:30 with stock price drops already in effect, although they can rebound during regular trading hours.
